The old hospital cemetery in Hall, which could contain the remains of up to 220 people killed by the Nazis. Photograph: Matthias Schrader/AP

A hospital graveyard in Austria has been found to contain the remains of what are believed to be Nazi euthanasia victims, authorities said today.

Preliminary building work on the site in Hall, the Tyrol province in western Austria, was halted as a search began to trace the identities of the victims and their families.

Oliver Seifert, a historian who recently found documents relating to the graveyard, in which around 220 patients of the psychiatric institute in Hall are believed to have been buried between 1942 and 1945, told a press conference today that many questions remained unanswered.

"At this stage we can't say that all 220 people were victims of the Nazi euthanasia programme but one of the central questions we will be looking into is how they died," he said.

He added that his discovery of the documents, during a reorganisation of the hospital archives, showed the death rate of patients at Hall went up considerably towards the end of the war, despite the fact that the institution was not officially part of the Nazis' euthanasia programme, under which tens of thousands of people with disabilities were killed. The graves may throw light on the way in which euthanasia as a policy was decentralised and, even without orders from on high, became systematic in many psychiatric institutions across the Third Reich whose head doctors bought into the Nazi belief that people with mental disorders were unworthy of life.

"We know that murder was actively carried out at other psychiatric institutions, by overdosing patients, neglect or undernourishment," Seifert said.

Until now there had been no official documentation supporting the idea that patients at Hall, which still operates as a psychiatric institution, had been murdered, although at least 360 patients from Hall are believed to have been taken to other institutions to be killed.

Christian Haring, deputy medical director of the hospital, said authorities were working on the theory that the graveyard was built at a time when Hall was being considered as the site of an official Nazi euthanasia centre. "It's quite possible that the hospital cemetery was laid out in October 1942 with a view to using Hall for euthanasia," he said, adding that patients died in significant numbers, with 30 deaths registered in March 1945 alone.

A commission has been given two years to investigate. Excavation of the graves is to start in March, by which time the area's snow should have melted.

Scientists will study each of the bodies in an attempt to ascertain their identities and causes of death.

The hospital launched a global appeal for those who believe their relatives might be among the victims to contact them. It also called for witnesses to come forward with any information that might help.

"Every memory has the potential to help us in researching the history of this cemetery," a spokesman said.